A SENIOR Deutsche Bank executive has been sidelined after a boardroom row over whether to mount a $6.5bn (pounds 3.8bn) bid for the US bank, Bankers Trust.

Jurgen Krumnow, chief financial officer, has lost out in favour of a new appointment believed to be more supportive of the American ambitions of the chief executive, Rolf Breuer.

Bankers say the changes, which will be rubber stamped at the next meeting of Deutsche Bank's supervisory board on 28 October, could clear the way for a deal with the US bank, provided the due diligence process gives Bankers Trust a clean bill of health.

The new man at Deutsche is Thomas Fischer, who is returning to Deutsche after a spell as chief executive at a regional savings bank.

Insiders say that internal discussions about how to finance a US bid are well advanced. Although the bank yesterday was sticking to its official line of "no comment" on the Bankers Trust approach, sources inside the bank say Deutsche could bring forward existing plans to issue New York- listed shares, so that the deal could be structured as a straightforward share swap.

Deutsche would issue US-listed stock to BT holders and effect a "pooling of interest merger", on the model of the recent Daimler/Chrysler deal between US and German car makers. "This could be done in six months less than the time it would take to get the approval of the US Federal Reserve for the deal," the source said.

Failing that, Deutsche could issue preference stock to BT shareholders. "There is no shortage of options," the source added. "That is not the issue."

Deutsche would also want to have a closer look at Bankers Trust's third- quarter results due out later today. These will confirm the degree to which the US bank has been hit by exposure to emerging markets and hedge- fund lending in recent weeks.

Shares in both Bankers Trust and Deutsche Bank rose sharply for the second day running yesterday. Deutsche jumped DM2.75 to DM104.95, while Bankers Trust rose $1/4 to $593/16.

BankAmerica, meanwhile, was off nearly $2 as the market reacted to news that David Coulter, the president, had resigned less than a week after the bank disclosed bad debt provisions of $1.4bn, including a $400m write- off on loans to DE Shaw, a specialist derivatives house.

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